Based on the polls, most Americans wanted the debt ceiling raised. The politicians obviously wanted the debt ceiling raised since the majority of them voted for it. Most of the media pundits wanted it raised as well. The majority got what they wanted, the debt ceiling was raised.
That's good, because that's all we got: Another increase in the debt ceiling, making this one the 75th increase since 1962.
Why do I say we got nothing but an increase in the debt ceiling? Yes, we got spending cuts equal to the debt increase, but the debt increase will last only until early 2013. We will breach the debt ceiling again in 2013. The $2.4 trillion in spending cuts are over a 10-year period. That means that on average, we will get cuts of only $240 billion a year.
The truth is, on average, we got $480 billion in cuts for the next two years for a $2.4 trillion increase in the debt ceiling for the same time period. Net, we will still be running deficits of $1 trillion or more for as far as the eye can see. That means that sooner or later, no one will be willing to loan us anymore money and then it will be all over for America.
Furthermore, in just a short period of time, we will have to go through this whole thing again, assuming our credit rating lasts that long. And just like all the times before, it will not make one bit of difference if there is a Republican or Democrat in the White House, the debt ceiling debate of 2013, will just be another joke when it comes to fiscal discipline.
It seems the politicians with the help of the media have again convinced the American people that the way to secure the full faith and credit of the U.S. is to raise the debt ceiling.
If you told your banker you could not pay your bills and you needed your banker to raise your debt limit and that would restore your full faith and credit, the banker would literally laugh at you. But, when the politicians do it, virtually everyone takes them very seriously.
One would think to secure the full faith and credit of the U.S. we would need to not raise the debt ceiling anymore, and to actually start to reduce our spending.